They are nearing retirement and have children in school.

He's a retired cop and very good at property management. 

Sounds to be like you are seeking retirement advice on a platform that mostly advocates for long term wealth.

The quick short answer in my opinion is this: If you want growth stick to the small multis that you know and once the mortgages are paid off retire fully.

@Roman StefaniwWhen retirement accounts in the US get financing, the loans are called "non-recourse."

Do this enough I guarantee you will get great info, insight, and just maybe an old timer ready to retire out who's open to seeing what they can do to make a deal work.

I never made more than $100k in a year working until my last year of employment, and still managed to retire at 50 with a lifetime pension from a combination of military and public service.

Living in bumfck NH started a chain reaction that enabled me to retire modestly at 28, just 3 years later.

However, nearing retirement, with our past experience in mind, we decided to try it again, this time just rehabbing one house to flip.So, I set up a self-directed IRA so we could use the retirement money we had left after the recession, and bought a foreclosure house that needed a lot work.

This either sounds like a seller looking to "retire" and liquidate his holdings or a Section 8 owner that hasn't kept the property (or rents) up to market levels.So, based on the numbers you're using, what return (IRR, Equity Multiple, or ConC) are you estimating you'll generate over your expected holding period?